TVA Insurer Must Supply $42 Million Toward Coal Ash Spill Cleanup

The Insurance Journal has reported Bermuda-based insurance company Arch was required to pay $42 million to the Tennessee Valley Authority (TVA) for the power company’s claim related to a coal ash containment pond breach in December 2008. The resulting spill released tons of toxic coal ash sludge from the Kingston Fossil Plant, which swamped homes, property and waterways in Roane County, Tenn. The cleanup, which has been ongoing since the spill, is expected to exceed $1 billion.

The decision, made in arbitration, is the first of three cases between the TVA and its insurers related to the coal ash spill. TVA spokesman Duncan Mansfield told the Chattanooga Times Free Press that the company is still trying to obtain $150 million from insurer ACE Bermuda and $50 million from Zurich insurance, the full policy limits. The TVA already has collected $92 million from its property and casualty insurance companies.

Despite the insurance, the TVA will be left holding the bag for the majority of the expense to clean up and repair the damage to the community surrounding the Kingston Facility. It is estimated the containment pond breach spilled 1.1 billion gallons of coal ash slurry into the Emory River and adjoining waterways, and covered more than 300 acres of property with the toxic sludge. The wave of coal ash knocked houses off their foundation and contaminated waterways used for fishing and recreation.

It is expected the clean-up efforts will continue for more than 15 years. The spill is considered one of the largest environmental disasters in U.S. history. More than 900 people filed lawsuits against TVA to recover damages for the emotional and financial devastation they suffered.